The profit-maximizing firm illustrated in Figure operates in a monopolisticallycompetitive industry. Which of the following best explains what happens in thelong run?Price4OMCATCAVCDMRQuantity DMRQuantityONew firms enter the industry and the firm's marginal cost curve shifts up, which leadsto a decrease in the firm's output.New firms want to enter the market but cannot since there are barriers to entry inmonopolistic competition.ONew firms enter the industry and the firm's demand curve shifts left and becomesmore elastic.O The market supply curve shifts right, reducing the equilibrium market price.

Profit maximization is the process by which a company aims to increase its earnings to the highest…

Answered: The profit-maximizing firm illustrated…

The profit-maximizing firm illustrated in Figure operates in a monopolistically competitive industry. Which of the following best explains what happens in the long run? Price MC ATC AVC D MR

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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